Himgiri Ispat Pvt. Ltd. vs Customs,Excise and Service Tax

Barin Ghosh, C.J.—A unit belonging to the assessee was mortgaged in favour of U.P. State Financial Corporation. The assessee failed to honour its commitments to U.P. State Financial Corporation. Accordingly, U.P. State Financial Corporation took over the unit of the assessee and, thereafter, by public auction, sold the same to the appellant in Central Excise Appeal No. 5 of 2009 and petitioner in Writ Petition (MS) No. 649 of 2009. After the unit was sold, the Excise Department contended that the assessee failed to discharge its dues due and owing to the Excise Department and since the appellant is the successor in interest of the assessee, it is liable to pay the same. The appellant denied its liability in that regard. Appellant approached the Appellate Authority under the Central Excise Act assailing the decision of the Assessing Officer to the effect that the appellant is obliged to discharge the said debts of the assessee. The Appellate Authority, according to us, correctly held that the appellant has come after lapse of time and the Statute does not authorize the Appellate Authority to condone such delay. On that ground, the appeal was rejected. Appellant, then, approached the Tribunal. The Tribunal also held that there is no scope of interference, inasmuch as, the appeal was so belated that there was no authority to condone the delay in preferring the appeal. Aggrieved thereby, the present Central Excise Appeal has been preferred. At the same time, appellant has filed a writ petition challenging the self-same order of the assessing officer. We are of the view that the Central Excise Appeal is not interfereable, inasmuch as, the reason for which the Appellate Tribunal rejected the appeal is sound enough. The appeal is, accordingly, dismissed.

Learned counsel for the Excise Department has contended that the writ petition is not maintainable, inasmuch as, in the writ petition, appellant has challenged the recovery proceedings stemming out from the self-same order passed by the assessing officer.

While right to prefer appeal is statutory, the same can be exercised to the extent Statute has granted. While a time-limit has been fixed for preferring the appeal, upon expiry of that period, the right to prefer appeal stands extinguished. If the Appellate Authority has been authorized to condone delay of a limited period as prescribed, the same itself prescribes that he has no authority to condone delay beyond the limit so prescribed. However, the right exercised by a citizen under Article 226 of the Constitution of India is not a statutory right, but is a constitutional right. If the Constitution has limited that right, of course, then the right has to be exercised within that limit. The fact remains that the Constitution, while conferring the right under Article 226 of the Constitution, did not fetter such right by any limitation whatsoever. In those circumstances, there cannot be a contention that the writ petition is not maintainable because it is belated. If the action complained of is non est from the day one, the same can be challenged even after 100 years. The question is, whether the action complained of in the writ petition is non est or not? The Central Excise Act provides the mechanism of recovery of excise duties. It permits recovery of such duties from the merchandise of the assessee in his control. It does not permit even recovery from those merchandise, which have gone to the buyers of the assessee. Upon failure to recover the same, the Act permits the dues to be recovered as land revenue. The words ''land revenue'' connote revenue, which is lawfully recoverable from the person, who is liable to pay the same for his properties. The fact remains that the property in question is not of the assessee, but of the appellant/writ petitioner. Therefore, by taking measures available for recovery of land revenue, dues due and owing by the assessee cannot be recovered from the properties of the appellant, who is a bona fide purchaser in auction. Learned counsel for the respondents has contended that in a previous round of litigation, a Division Bench of this Court in a similar writ petition had observed that the appellant is required to take steps in the appeal by approaching the Appellate Authority in the Department and, accordingly, a self-same writ petition is not maintainable. The fact remains that the approach, though belated, was not adjudicated at all by the authorities, to whom, this Court directed the appellant to approach. In law, a person cannot be remediless, particularly in respect of a matter, which is void ab initio from the day one. We, accordingly, allow the writ petition and quash all steps taken for recovery of the dues of the assessee from the assets and properties of the appellant/writ petitioner.